Why traceability plays a key role in social compliance

Fashion Revolution's Fashion Transparency Index is one tool that monitors and ranks high street clothing brands on transparency across their value chains

With traceability playing a key role in addressing the rising importance of social compliance, it might be time to review your traceability strategies and confirm you're armed with comprehensive product information across your supply network, says Thomas Ng, managing director, supply chain solutions, Amber Road.

Today's consumers expect accurate and detailed product information at the point of sale to ensure that apparel, footwear, food and other products meet their social and ethical standards. As companies recognise this growing consumer demand, many are advancing their traceability efforts to provide consistent and complete sourcing, social, and ethical product background information.

While many of us were probably introduced to worker abuse by reading Upton Sinclair's book 'The Jungle,' we probably thought many of these sub-standard working conditions had been eradicated since 1906, when the book was published. However, recent workers' rights scandals – such as slavery in the Asian seafood supply chain, or the collapse of the Rana Plaza building in Bangladesh – make it clear that such issues are far from extinct.

In response, many companies have greatly expanded their approach to supplier auditing, to include social compliance, sustainability, and traceability:

Social compliance – valuing and protecting the health and safety of employees, and remaining accountable for the safe community and environmental practices in which they operate.

Sustainability – not being harmful to the environment or depleting natural resources.

Traceability – the ability to document the origin, history, location, and use of a raw material or product.

So, what's driving the recent pivot toward social compliance? For many corporations, it boils down to corporate risk management, but there's more to the story:

Consumers have access to instant, global information, and expect to have access to this detailed product origin information throughout the buying experience.

A crisis in the global supply chain can impact brand reputation and customer demand immediately. What occurs in an apparel factory in Bangladesh or a high-tech contract manufacturer in Taiwan can stream over the web within minutes.

Consumers and businesses have a greater awareness of the need for sustainable sourcing and production throughout the supply chain.

Traceability plays a key role in addressing these concerns. In many cases, companies have introduced their own traceability strategies and continue to progress their efforts.

In other cases, industry standards and independent organisations are driving the awareness of traceability. For example, the United Nations Global Compact recently launched a study to identify the benefits of traceability solutions within the apparel sector. In another example, the Better Cotton Initiative (BCI) has introduced traceability efforts to improve the working environment of cotton workers, growers, and other supply chain parties.

In response to these social compliance-driven traceability projects, global companies have seen a range of benefits, including:

Improved product quality;

Lower production costs;

Improved capacity to minimise risks;

Enhanced regulatory compliance;

Higher consumer demand with verified sustainability claims.

Keep in mind that traceability goes beyond your own organisation in addressing these new social accountability standards. Companies must also collaborate with a variety of supply chain partners to fully monitor and document product information from the raw material source through delivery to the end consumer. These partners form a portion of your company's brand image as well.

Additionally, complying with regulations is an important part of protecting your brand's image, maintaining customer satisfaction and avoiding costly liability claims against your company.

As consumers (and regulators) continue to stress the importance of social compliance, it might be time to review your traceability strategies and confirm that you're armed with comprehensive product information across your supply chain network.

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